Last-Minute Holiday Shopping Doesn't Help Sales

Despite holiday shoppers' last-minute bargain-hunting sprees, ShopperTrak Wednesday lowered its 2008 U.S. holiday retail sales forecast to call for a decline of 2.3 percent on a 16 percent drop in traffic and said it expected an even weaker store performance in January.

The group, which monitors customer traffic, had previously forecast a sales increase of 0.1 percent on a 9.9 percent traffic decline.

Its revised forecast echoed estimates by other retail trade groups and tracking firms, which have said holiday sales declined for the first time in at least 40 years.

Retailers began discounting earlier in the year than usual ahead of Christmas to lure shoppers stunned by sharp downturns in real estate and stock markets, rising unemployment and tougher credit terms.

"We expect retail performance will dive over the next couple of weeks as retailers stop offering deeply discounted items and sales and traffic levels return to seasonal low points following the holidays," said Bill Martin, co-founder of ShopperTrak.

According to ShopperTrak's retail traffic index, total U.S. foot traffic for the Christmas week ended Dec. 27 fell 4.9 percent from the year-earlier period.

The firm's retail sales estimate for the same period showed a 21.2 percent retail sales increase for the week.

Investors are bracing for retail earnings reports that show the profit impact from deep discounts offered by everyone from department store operators like Macy's Inc to specialty stores like Gap and low-price retailers like Target and Wal-Mart Stores .

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